Savills: Real estate investment volume totals $24.7 bil in 2022, down 1% y-o-y

Investment Tengah EC Sales value in Singapore per the investment report by Savills Singapore came in at $24.7 billion for 2022, a decline of 1% y-o-y.

However, the market saw some encouraging news in 4Q2022 as investment sales value clocked in at $2.81 billion, slipping only 36.1% q-o-q. Notably, this was the third consecutive quarter of decrease, due likely to the slowing market conditions.

Generally, residential sales made up the largest portion of investment value last quarter, at 49.9% of the total. However, to no surprise, the segment halved to $1.4 billion in 4Q2022 – the second consecutive quarter of decline.

In contrast, the commercial segment saw a rebound in activity, expanding 28.4% q-o-q to $1.02 billion due largely to a 166.1% q-o-q growth in office investment sales.

Unfortunately, retailers and industrial sectors declined 34.9% and 48.1% q-o-q respectively. Retail sales were weighed down by lower strata sales values, while shophouse transactional values were also found to be less.

For 2023 though, Savills expects the investment market to stay afloat. This is due to the greater number of Government Land Sales (GLS) on offer, the $2.16 billion sale of Jurong Point, and the sale of strata units at Thomson Plaza.

Alan Cheong, executive head of Savills Research, suggests it could be a fruitful year for investments despite the economic and interest rate headwinds. With the openness of the economy and a positive perception of Singapore, total investment sales value should hold up in 2023.

Savills projects total investment sales value for the year to range between $24-25 billion, with activity potentially damped by interest rate pressures.